Another Court Makes Righthaven Pay Up For Its Trolling Ways

from the eine-kleine-schadenfreude dept

The judgements against copyright troll Righthaven are starting to pile up. Righthaven recently tried (unsuccessfully) to convince a Nevada court that $34k was more money than it could reasonably scrape together to post a bond while it appealed the adverse judgment in that case. Now another Nevada court has ruled against Righthaven, awarding the defendant Thomas DiBiase reasonable attorneys' fees and costs; this time in the even larger amount of $119,488.00. That's got to hurt.

Filed Under: attorneys fees, thomas dibiase
Companies: righthaven

Judge In South Carolina Poised To Dismiss Righthaven Suit There As Well

from the down-goes-another-one dept

Ah, the hits just keep on coming for Righthaven. Having already had judges in Nevada and Colorado dismiss Righthaven cases for lack of standing, the one remaining state where Righthaven had tried its questionable legal tactics was South Carolina, which had prompted a somewhat epic countersuit. Not surprisingly, it's looking like it's a trifecta of losses for Righthaven, as magistrate judge Jacquelyn Austin has made it clear that she's not buying whatever it is that Righthaven is selling. She's given the company until October 28th to explain why the case shouldn't be dismissed for lack of standing.

Defendant contests Plaintiff’s ownership of the disputed copyright and argues the case should be dismissed for lack of standing. Plaintiff’s ownership of its assigned copyrights has been contested in Nevada and Colorado. Judges in Nevada have dismissed complaints for lack of standing and issued orders to show cause why these cases should not be dismissed for lack of standing. The copyright assignments in the Nevada cases are governed by a Strategic Alliance Agreement between Righthaven LLC and Stephens Media LLC which appears to be very similar to the Copyright Alliance Agreement (the “CAA”), including its Schedule 1 – Terms and Conditions, between Plaintiff and MediaNews Group, Inc. (“MediaNews”) that Defendant asserts governs the copyright assignment at issue in this case.* Moreover, the CAA appears to support Defendant’s claim that Plaintiff does not have standing to sue for copyright infringement. Specifically, the CAA appears to qualify any copyright assignments it governs such that Plaintiff is left only with a bare right to sue and does not own any exclusive rights in the copyright, as would be required for Plaintiff to have standing to allege an infringement claim on those copyrights. See Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881 (9th Cir. 2005) (holding that an assignee who held an accrued claim for copyright infringement, but who had no legal or beneficial interest in the underlying copyright itself, could not institute a cause of action for infringement); Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27 (2d Cir. 1982) (holding that one who owns no exclusive right in a copyright may not sue for infringement; only the owner of an exclusive right under a copyright may bring suit).

Although Plaintiff argues substantive analysis of the assignment must await discovery, the Court believes this issue should be addressed because it goes to Plaintiff’s standing to bring a copyright infringement claim at all. Thus, in the interest of judicial economy, the Court issues this Order to Show Cause why the case should not be dismissed for Plaintiff’s lack of ownership of any exclusive rights in the copyright and, therefore, lack of standing to sue.

I'm assuming that this is really just more guidance to Righthaven competitors from a judge who recognizes Righthaven's "genuine" legal arguments, right Steve?

Filed Under: copyright, fraud, south carolina, unauthorized practice of law
Companies: righthaven

Court Rejects Righthaven's Attempt To Stall About Paying Legal Fees

from the on-the-hook dept

We recently wrote about Righthaven trying to get the appeals court to drop the requirement that it put up a $34k bond to cover legal fees owed in the Hoehn case, as it argued it needed the money for its other cases. The appeals court didn't buy the argument. As you can see below, it denied the "emergency motion" with no real commentary, other than to point to a few previous cases. So, Righthaven now just has a short period of time to find $34k to put up for bond, or it may expose itself to contempt charges or other sanctions.

Filed Under: hoehn, legal fees, randazza, shawn mangano
Companies: righthaven

Righthaven Still Trying To Avoid Paying Any Legal Fees Of Those It Illegally Sued

from the of-course dept

Last we heard about Righthaven, district court judge Philip Pro had given it a tiny bit of breathing room, giving the company 30 days extra to come up with the bond to prove that it could pay the attorneys fees ordered (a little over $34,000) in the Hoehn case. While Hoehn's lawyers (Randazza Group) had sought immediate payment earlier, Judge Pro said that Righthaven could wait out the appeal... if it could post bond. Folks in our comments pointed out that it was unlikely that Righthaven would post the necessary bond... and, indeed, it has filed an "emergency" request with the court, trying to avoid posting the bond. In the filing, Righthaven lawyer Shawn Mangano explains that no one seems willing to post a bond unless Righthaven forks over the entire amount due. In other words, no one believes that Righthaven has any shot of winning this case or of remaining solvent for very long.

Righthaven has attempted to secure a bond as required by the district court to stay the Judgment pending appeal. To date, Righthaven has been unable to secure a bond. The terms required by the bonding companies that Righthaven’s counsel has investigated and/or contacted are an impediment to meeting the district court’s stay requirement. The bonding companies are requiring what amounts to a full cash bond. In sum, the bonding companies ask for full cash payment, certain forms of collateral held by the company or irrevocable letters of credit be posted to obtain a bond in the amount requested. To date, Righthaven has been unable to satisfactorily meet these requirements in a manner acceptable to a bonding company. Due to the pending appeals and the stay of certain active litigation matters, Righthaven’s operating capital is being utilized to service its monthly operating expenses. As such, it is presently unable to allocate more than $34,000 toward the bond required by the district court to stay the Judgment pending appeal.

The Randazza Legal Group wasted little time in responding and pointing out the interesting choice of language by Righthaven. It's not that Righthaven says it can't pay, but it seems to suggest it would prefer to use that money towards appeals. Randazza compares Righthaven to the title character in Herman Melville's Bartleby the Scrivener:

In Herman Melville’s classic, Bartleby the Scrivener, an attorney finds frustration with his scrivener, Bartleby. Any time Bartleby is directed to perform a task, he replies with the classic refrain: “I would prefer not to.” Initially infuriated, but beguiled by Bartleby’s charmingly passive insolence, the narrator tolerates Bartleby’s masterfully eccentric defiance, but eventually fires him. Once fired, Bartleby’s behavior becomes stranger, and he refuses to leave the premises of his employer, who finds Bartleby’s stubbornness to be an immoveable object. Bartleby’s defiance, as effective as it is, eventually leads to his undoing. Bartleby’s preference leads to his imprisonment and starvation, as he finally encounters both men and forces of nature who are unmoved by his antics.

They go on to point out that Righthaven brought this upon itself -- proactively suing hundreds. The filing notes that Righthaven has been losing consistently and has not won anything since the details of its arrangement with the two newspaper partners it had became public.

The time has come for Righthaven’s shenanigans to end. Righthaven picked this fight. Righthaven, created and operated by an attorney, should have known better. Righthaven could have changed course at any time. Righthaven preferred not to. The consequence for Righthaven’s actions is now at its door, and whether it would prefer to or not, the law requires it to comply. Preferring not to comply with a lawfully issued court order is no emergency, and Righthaven should be compelled to answer for its transgressions. Even Bartleby, charming as he was, eventually suffered the inevitable consequences of his irrational intransigence. Righthaven must as well.

The filing calls into question Righthaven's claim that it cannot put forth $34,000, noting that it's either lying, or isn't going to be able to pay for the appeals it has filed. The suggestion is that Righthaven is trying to use up its remaining funds to avoid paying anyone else:

Righthaven has provided no statement of its operating expenses, and it appears that Righthaven’s sole expenses are paying its CEO, who hatched and profited from this illegal scheme, and paying its attorneys in order to file frivolous motions and avoid paying lawful judgments. It is clear that Righthaven’s plan is to consume its remaining capital by transferring money to those who least deserve it, exhausting its funds until it is in a state of bankruptcy. The courts, thus far, have been unwittingly complicit in this scheme by their failure to take a definitive and stand against the ongoing fraudulent transfers. It must stop here.

Righthaven’s mass litigation model now descends upon the Court of Appeals, and it has brought no fewer than five appeals before this Court – all of which are currently pending. Beyond this case, Righthaven is also the appellant in Realty One Group, Incorporated, Case No. 11-15714 (9th Cir., filed Mar. 24, 2011); Jama, Case No. 11-16358 (9th Cir., filed June 2, 2011); DiBiase, Case No. 11-16776 (9th Cir., filed July 22, 2011); and DU, Case No. 11-17210 (9th Cir., filed Sept. 19, 2011). Righthaven also appealed a loss to the Tenth Circuit. Wolf, Case No. 11-1469 (10th Cir., filed Oct. 11, 2011). Six appeals pending, yet Righthaven claims that being required to post a mere $34,045.50 bond is an “emergency.” Righthaven mocks the definition of the word and mocks this court by bringing this frivolous motion.

Furthermore, the filing notes that Righthaven (in typical fashion) has failed to file the opening brief of its first appeal, even thought it was due nearly a month ago:

The propriety of Righthaven’s appeals is in serious doubt. Righthaven’s opening brief in its first appeal, Realty One Group, Inc., Case No. 11-15714, was due to this Court on September 19, 2011 and has yet to be filed. This appeal appears to be another stall tactic for Righthaven to deny the defendant in that case, and the First Amendment principles its fair use victory embraces, any finality. This leaves two possibilities explaining Righthaven’s financial condition: Either it has $34,000 that it can use to post a bond and it prefers not to, or it is absolutely broke and pursuing its appeals in bad faith, in order to deny prevailing defendants finality – and extract a settlement from them still.

This is like watching a train wreck in excruciatingly slow motion.

Filed Under: hoehn, legal fees, randazza, shawn mangano
Companies: righthaven

Court Gives Righthaven A Little More Time To Pay Attorneys Fees

from the but-not-much dept

As Righthaven is desperately trying to avoid paying legal fees to Marc Randazza in the Hoehn case, it appears that the company has caught a very slight and brief reprieve. Judge Philip Pro has given the company a little bit more time, saying that Righthaven doesn't need to pay attorneys fees while the case is on appeal -- but it must post a bond to show that it can pay the $34k within 30 days. The judge then rejected the attempt to have Righthaven declared in contempt, and to allow the US Marshals to seize Righthaven assets. That's pretty understandable, given the appeal. Requiring Righthaven to post bond seems quite reasonable, even though I'm sure Righthaven will try to get out of it. Judge Pro also made it easier for Righthaven to post bond by saying that it only had to post bond on the $34k, rather than a much larger sum, including additional legal fees for the appeals process. This basically gives Righthaven a very, very brief respite, but isn't going to help. Even the judge makes it clear that Righthaven "does not enjoy a reasonable probability of success on the merits of its appeal."

Filed Under: attorneys fees, hoehn
Companies: righthaven

Righthaven Desperately Trying To Avoid Paying Legal Fees

from the keep-digging dept

The Righthaven saga continues. Just as it's lost in Colorado, and was told it needs to pay legal fees there as well, the company is still trying to get out of having to pay legal fees in the Hoehn case in Nevada. As you may recall, Righthaven was ordered to pay legal fees of $34,045.50 by September 14th. It did not do so. Following that, Hoehn's lawyer, Marc Randazza (whose name you're seeing a lot in these Righthaven cases), asked the court to declare Righthaven in contempt, and sought both to put the company into receivership and to allow US Marshals to seize property from Righthaven for its failure to pay. In typical plodding fashion, Righthaven has still not paid up... but has filed a motion (embedded below) asking the appeals court to put off the district court's judgment, because it believes the ruling will be overturned (ha!) and having to pay up would cause irreparable harm. The motion is worth reading. As with previous Righthaven motions we've seen, the company seems to think that mocking the district court judge is a reasonable strategy. You can feel the contempt for the judge in the filing, which I can't imagine will go over well.

That said, I wouldn't be surprised if the Appeals Court grants the stay. It's not uncommon for appeals courts to do so, and it's unclear if the Appeals Court is aware of Righthaven's continued antics in these cases. Still, in the end, I can't see Righthaven winning, so this just seems like delaying the inevitable.

Filed Under: legal fees
Companies: righthaven

Righthaven Loses (Big Time) In Colorado As Well

from the another-one-bites-the-dust dept

Another day, another Righthaven disaster. We've been waiting for a while for Judge John Kane in Colorado to rule on Righthaven's cases there. As you may recall, he'd put them all on hold back in May to determine if Righthaven had standing. He put them on hold after the details of the sham copyright assignments came out, but before a series of Nevada courts all ruled against Righthaven, saying that the company had no standing to sue, because it did not actually hold the copyright.

Judge Kane has finally ruled in one such case and once again Righthaven comes up a loser. Judge Kane ruled similarly to the Nevada cases in explaining that Righthaven did not have standing or the copyrights properly assigned to it, and thus he has dismissed the case and accelerated things by switching the status of the case from a motion to dismiss up to summary judgment, allowing him to order Righthaven to also pay legal fees (something it's been avoiding and ignoring in other cases).

The ruling is a worthwhile read. While those sued by Righthaven used the precedent set in the Silvers case, which states that you cannot transfer just the bare right to sue, Judge Kane points out that's only controlling precedent in the 9th Circuit, and since this court is in the 10th Circuit, it is not controlling. So rather than just relying on Silvers, Judge Kane does a thorough analysis of copyright law -- going all the way back to the Constitutional origins of the law. It's a worthwhile read. It starts with "promoting the progress" (of course) and then goes through some details of the 1909 Copyright Act and the 1976 Copyright Act. In looking at the 1909 Act, Judge Kane notes the historical "balance" of copyright law, in seeking greater legal dissemination of the works, and how that's limited by the ability to assign the bare right to sue:

A third-party who has been assigned the bare right to sue for infringement has no interest in the legal dissemination of the copyrighted material. On the contrary, that party derives its sole economic benefit by instituting claims of infringement, a course of action which necessarily limits public access to the copyrighted work. This prioritizes economic benefit over public access, in direct contradiction to the constitutionally mandated equilibrium upon which copyright law is based. The legislative history relating to the Copyright Act of 1976 supports this interpretation.

It's worth noting that this was the case in which lawyer Marc Randazza filed his Glengarry Glen Ross motion, which some had criticized. In this case, it appears to have worked.

So, what's left for Righthaven? Its cases in Nevada appear to be dead. The cases in Colorado are now likely dead as well. There's a case in South Carolina that probably isn't long for this world. Righthaven has stopped filing new cases. So, right now, it's fighting to not pay legal fees (more on that shortly), and also facing charges of unauthorized practice of law in a few states. It may also be working on an appeal, though one has to wonder if it actually has the money for an appeal at this point...

Update: Not a huge surprise, but we've received word that Judge Kane has started asking Righthaven to show cause for why other cases in Colorado shouldn't face this same result by October 7th.

Filed Under: colorado, copyright, standing
Companies: righthaven

If Righthaven Declares Bankruptcy, Expect Lawyers To Go After Stephens Media, Media News, And Righthaven Principals

from the limited-liability? dept

There are lots of rumors swirling about a possible Righthaven bankruptcy, but that doesn't seem to worry those pushing for class action lawsuits against the company. Lawyer Todd Kincannon, whose been leading the charge against Righthaven on that front, apparently told law professor Eric Johnson that he'll keep going after other parties:

“I always knew Righthaven would file bankruptcy if things got rough,” Kincannon told me by e-mail. “They were set up as a limited liability company just so they could do that. Fortunately, Stephens Media, MediaNews Group, Sherman Frederick, Steve Gibson, and Dickinson Wright all seem to have plenty of money.”

Of course, Righthaven, being a limited liability company, may make that more difficult. And as awful a company as I think Righthaven has been, I'm a bit wary of breaking down the walls of a limited liability company. If it can be shown that Righthaven was set up by folks knowing that the effort was fraudulent, and that the sole purpose of Righthaven was to protect those who knew that what they were doing was illegal, that may open the window for pursuing other parties further. But, if they honestly believed that this was a legit operation and setup, I'm really not convinced that the pursuit should go beyond Righthaven -- especially to folks like Steve Gibson. I could see going after Stephens Media and MediaNews Group as one could argue they were really the driving forces behind the lawsuits. But taking on individuals seems like going too far.

Filed Under: bankruptcy, corporate veil, todd kincannon
Companies: medianews, righthaven, stephens media

Righthaven Fails To Pay Attorneys Fees Ordered By The Court, Court Asked To Declare Righthaven In Contempt

from the grubstaked dept

Ah, Righthaven. The company is now building up a history of not paying, even after a court orders it to pay. While there have been rumors swirling about filing for bankruptcy, in the meantime, the company just seems to be ignoring court orders. As you may recall, back in June, Righthaven lost one of its many cases (and many losses) to Wayne Hoehn, who Righthaven had sued despite not properly securing the copyrights in question. The court found this so egregious that it ordered Righthaven to pay $34,045.50 in legal fees to the Randazza Group, which had represented Hoehn, by September 14th.

Well, September 15th rolled around... and no money, as you can see from the filing below. Righthaven had asked the court for a stay to grant it more time, but the court had not ruled either way, meaning that the company should have paid up. Hoehn had even offered to give it more time if Righthaven would post bond to show that it could pay. Righthaven chose not to respond.

Because of all of this, on Friday, Hoehn asked the court to declare Righthaven in contempt of court, to appoint "a receiver to manage Righthaven's remaining business and assets, and to require the company to post $148,118 in cash or via a bond with the court. Why the higher number? That's the calculated value of the additional fees expended since the original ruling, plus the anticipated costs of the appeal that Righthaven has indicated its planning.

Late on Sunday, Hoehn/Randazza kicked it up a notch, filing for a Writ of Execution (embedded below), which would allow for the potential seizure of Righthaven bank accounts and property in order to attempt to get the amount ordered by the court.

It seems likely that Righthaven simply can't pay. I wonder how it feels to be on the receiving end of a judicial system ordering the company to pay up more than they have. It seems kind of ironic, since it tried to put hundreds of individuals and companies in that exact position via its business model.

Filed Under: attorneys fees, contempt, copyright
Companies: righthaven

Righthaven, King Of Suing Without Notification, Whines To Judge About Motions Filed Against It Without Enough Notification

from the cry-me-a-freaking-river dept

Righthaven doesn't do irony well. While there are lots of points of criticism on which to ding Righthaven, one of the biggest (and first) criticisms of the company's strategy was its failure to issue takedowns or any notification to the hosting provider when it came across works it believed were infringing. While not necessarily required, it certainly has become standard in copyright situations to issue a DMCA takedown and/or a cease & desist letter when it comes to infringement, and then only follow through with a lawsuit if that doesn't stop the alleged infringement. But, of course, Righthaven's business strategy was all about getting people to pay up -- not about getting infringing content offline. Such prior notice would go against that strategy. So, Righthaven was very much a "sue first" company. As far as I know, it never notified any of the hundreds of sites it sued, prior to the lawsuits.

So there's a fair bit of irony in seeing Righthaven's latest skirmish, going on in Colorado, where all of Righthaven's cases are under review, as the judge covering the case was profoundly unimpressed by Righthaven's attempt to abuse the judicial system as a part of a business model.

In one of the cases, the guy that Righthaven had sued, Leland Wolf and his lawyers from the Randazza Group, had filed a motion for preliminary injunction against Righthaven. Rather than respond on the merits, Righthaven threw a hissy fit, arguing that filing such a motion without first discussing it with Righthaven was a violation of a minor local rule. Yes, you read that right. The company, whose entire business model is based on suing people without any notice whatsoever, got all upset over an opposing party filing a motion without fully discussing it. You can see the motion below, along with the back and forth between the lawyers for Randazza and Righthaven. At times, the email exchanges are pretty amusing. Righthaven lawyer Shawn Mangano, for example, complains about Randazza sending him an email at 7:30 pm, and demanding a response by the following afternoon, saying that such late night notice is unfair. To that, the lawyers respond:

First, you claimed in your lengthy September 8, 2011 email that we have not made a sufficient effort to meet and confer with you about this motion. Yet, you responded to Mr. DeVoy's e-mail within approximately 75 minutes of its transmission. Later that night, shortly before 3:00 am, you filed an application for a stay of execution of the judgment in Righthave LLC v. Hoehn.... The application was lengthy and thoroughly researched, and was likely in the works long before it was filed. I believe your accusation of us trying to sandbag you with a long-planned motion is a bit ironic when, just 6 hours later, you did what your e-mail accused us of attempting.

Additionally, reviewing numerous cm/ecf filings that I have received in cases where I am counsel of record, or those that Mr. DeVoy have forwarded to me for review, they are consistently filed after 10pm, and often after midnight. I have personally participated in calls with you near midnight. By all appearances, your practice is clearly nocturnal. In fact, if we were attempting to sandbag you, it would seem tactically prudent to do so by providing information to you at 9:00 AM.

The letter goes on to detail a history of Righthaven actions in which it had surprised Randazza and its clients with filings. In fact, it notes: "The fact is, we have never given courtesy in a Righthaven case, and not then been stunned with some act, which makes us regret doing so."

It appears that the judge was not impressed by Righthaven's tantrum in this case either, and almost immediately issued an order that the hearing "will proceed as scheduled."

Keep digging, Righthaven.

Filed Under: copyright, notice, procedure
Companies: randazza legal group, righthaven